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GBP/USD – Pound Shrugs as Retail Sales Volumes Halts Sharp Decline

Kenny Fisher

GBP/USD is showing limited movement on Tuesday. In early European trading, the pair is trading at 1.2883, down 0.11% on the day.

Retail Sales Volume Shows Improvement

There was positive news on the consumer front, as British retail sales volumes were largely unchanged in the year to November. The CBI Realized Sales indicator improved to -3, up from -10 a month earlier. Still, there is a long way to go, as the indicator has not been in positive territory in 2019. Consumers remain apprehensive about the economy, and Brexit continues to hang over the economy like a black cloud.

Brits will head to the polls on December 12, and traders should be prepared for volatility from the pound as we get closer to Election Day. A BBC poll released on Saturday gave the Conservatives 41% of the vote, followed by Labor at 29%. Given that the Conservatives are pro-business, a significant lead in the polls can be considered bullish for the pound.

Technical Analysis

GBP to USD remains rangebound this week. On the downside, we find support at 1.2800. Below, we have the 50-EMA line at 1.2762, which is immediately followed by support at 1.2750.

On the upside, there is immediate resistance at 1.2910. This is followed by resistance at the symbolic number of 1.300. With the GBP/USD appearing content to remain within a narrow range, it could be an uneventful week for the pair.

GBP/USD 1-Day Chart

Pacific Currencies – Summary

USD/CNY

USD/CNY is unchanged on Tuesday and is currently trading at 7.0352. On the technical side, there is resistance at 7.0400, with the 50-EMA line at 7.0475.

AUD/USD

AUD/USD is flat and is presently trading at 0.6778. On the technical side, we find immediate support at 0.6770. This line is vulnerable and could be tested at any time.

NZD/USD

NZD/USD is almost unchanged and is currently trading at 0.6419. After weak spending growth in the first half of 2019, consumers were in the mood to spend in the third quarter.  New Zealand retail sales jumped 1.6% in the third quarter, crushing the estimate of 0.5%. This marked  a 3-month high. The core reading was even stronger, at 1.8%, up from 0.3% in the second quarter. However, the response of NZD/USD was muted, as the pair is trading sideways for a fifth consecutive day.

This article was originally posted on FX Empire

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